The Top Two Benefits of Choosing a Newly Built Home
When you’re planning a move, it’s normal to wonder where you’ll end up and what your future home is going to look like. Maybe you’ve got a specific picture of that house in your mind. But unless you came into this process knowing you want to buy a newly built home, you may not have pictured new home construction. A trusted real estate agent can help walk you through these two reasons you may want to reconsider that. 1. Including Newly Built Homes Could Expand Your Choices There are two main types of homes available on the market: new and existing. A newly built home refers to a house that has just been constructed or is still in the process of being built. An existing home is one that a previous homeowner has already lived in. Currently, the inventory of existing homes is tight, but there may be more options for you among newly constructed homes. According to data from the Census Bureau and the National Association of Realtors (NAR), newly built homes now represent a larger portion of today's housing inventory than usual: Between 1983 and 2019 (considered the last normal year in the market), newly built homes accounted for only 13% of the total homes for sale. But today, that figure has climbed to over 33%. After more than a decade of underbuilding, builders today are not overextending. Even with the increase in new construction, there remains a significant housing shortage. However, for you, the rise in new builds can be transformative, providing you with more options in your search. 2. Newly Built Homes May Be More Affordable Than Expected You might still be asking if a new build is genuinely within your reach. If you’ve previously dismissed them, thinking they would exceed your budget, it might be time to reassess. The price gap between newly built homes and existing houses is narrowing. Here's why. Builders focus on what’s in demand, and they understand that people need more options now, especially smaller and potentially more affordable ones. That's why they’re constructing smaller homes at lower price points. The gap between the prices of new and existing homes is shrinking as a result: As LendingTree notes: “In the past, newly built homes have been much more expensive than existing homes — but that gap has been getting smaller recently. In some places today, you may find that the cost to build versus buy is roughly the same.” Similarly, CNBC reports: “While new builds are still sold for slightly more than existing homes, the price gap has significantly narrowed . . .” Additionally, some builders are offering incentives such as price cuts and mortgage rate buy-downs to sweeten the deal. Today, there are plenty of reasons why new builds may be worth considering. Other buyers certainly seem to think so. As Freddie Mac states: “As the supply of existing homes for sale remains low and home prices continue to rise, more buyers are choosing to purchase new homes than in previous years.” However, it's essential to understand that buying a newly built home isn't the same as buying an existing one. Builder contracts have unique clauses and considerations. Therefore, partnering with a local agent who understands the market, builder reputations, and contract specifics can ensure you have an expert by your side to help you explore this option. Bottom Line If you're curious about what builders are doing in our area, let’s connect and explore the options together. And if you're open to casting a wider net to expand your choices even more, we can discuss broadening your search to include nearby towns.
Why the Sandwich Generation Is Choosing Multi-Generational Homes
Are you part of the Sandwich Generation? This term, as defined by Realtor.com, refers to about one in six Americans who are simultaneously caring for both their children and their aging parents or grandparents. If this situation resonates with you, you’re likely aware of the unique challenges that come with juggling these responsibilities. Yet, there’s a silver lining: it might actually help you when it comes to purchasing a home. How Does It Assist in Buying a Home? Realtor.com conducted a survey among the Sandwich Generation to see if they felt that caring for both children and parents made it easier for them to afford a home. A surprising one-third of participants believed that their situation provided an advantage in home buying (see graph below): Here’s how being part of a multi-generational household can benefit you financially: Shared Expenses: In a multi-generational living arrangement, you have the opportunity to combine financial resources. By sharing the cost of living, such as mortgage payments and utility bills, you can significantly ease the financial burden. This collaboration might even allow you to afford a larger or more desirable home than if you were to go it alone. Built-In Childcare: Having grandparents living under the same roof can help save on childcare expenses. They can provide valuable assistance by looking after your children while you're working, reducing or even eliminating the need for costly daycare services. Beyond these financial benefits, there are additional perks to multi-generational living. According to the Profile of Home Buyers and Sellers from the National Association of Realtors (NAR), some of the most appealing advantages include: Easier Care for Aging Parents: Living with elderly parents can make caregiving more manageable. It allows for greater convenience and can contribute to their overall happiness and health, thanks to increased social interaction and a stronger sense of community. Quality Family Time: Living together facilitates more time spent with loved ones, leading to cherished memories and closer family bonds. The Mortgage Reports summarize it succinctly: "Buying a house with your parents can be a great way to ease caregiving, support young children, or simply bring loved ones closer together. Considering the steep rise in home prices over the last few years, it can make homeownership a lot more affordable." How a Real Estate Agent Can Assist You If you belong to the Sandwich Generation and are considering purchasing a multi-generational home, partnering with a local real estate agent can be invaluable. Finding a home that accommodates everyone's needs requires expertise. An experienced agent can help you navigate the complexities of locating a property with the right space and features for all family members. Conclusion While being part of the Sandwich Generation comes with its set of challenges, it also offers significant advantages when it comes to buying a home. The ability to pool resources and support each other may provide a financial edge, making homeownership more attainable. If you're interested in exploring multi-generational living options, let’s connect to discuss how your unique situation can be leveraged to secure the perfect home for your family.
Are Home Prices Going to Come Down?
In today’s real estate landscape, headlines often paint a confusing picture of what’s happening with home prices. Some articles suggest an imminent crash, while others forecast continued growth. So, what’s the reality? Let’s dive into the facts and clarify what’s truly going on with home prices today. What Does a Price Correction Really Mean? The term "correction" is frequently used when discussing potential changes in home prices. But what exactly does that mean? Danielle Hale, Chief Economist at Realtor.com, explains it this way: “In stock market terms, a correction is generally referred to as a 10 to 20% drop in prices. . . We don't have the same established definitions in the housing market.” In the context of real estate, a correction doesn’t necessarily indicate a dramatic fall in home prices. Instead, it reflects a slowing pace of growth, where prices stabilize after a period of rapid increase. Essentially, home prices are not plummeting; they're simply finding a more sustainable growth rate. While individual markets may experience different trends, a drastic nationwide decline is unlikely. The Real Estate Market Is Returning to Normalcy Between 2020 and 2022, home prices surged at an unprecedented rate. Factors like low-interest rates, a significant shortage of available homes, and heightened buyer demand fueled this growth. However, such aggressive price increases couldn’t persist indefinitely. Now, we’re witnessing a slowdown in price appreciation—a key indicator that the market is gradually normalizing. According to recent data from Case-Shiller, while prices are still climbing, the pace is noticeably more measured compared to the dizzying heights of the past few years (See graph below): Current Trends: The latest figures show that home prices have begun to rise nationally after a period of relative stagnation last year. However, this increase is much more balanced and sustainable. Key Takeaway: The market has shifted from the extraordinary growth seen during the pandemic to a healthier and more manageable rate of price increases. What Lies Ahead for Home Prices? Looking ahead, experts agree that home prices will likely continue to appreciate, but at a more moderate pace. Marco Santarelli, Founder of Norada Real Estate Investments, puts it succinctly: “Expert forecasts lean towards a moderation in home price growth over the next five years. This translates to a slower and more sustainable pace of appreciation compared to the breakneck speed witnessed in recent years, rather than a freefall in prices.” The real estate market remains influenced by the fundamental forces of supply and demand. An increase in housing inventory coupled with decreased buyer demand—partially due to higher mortgage rates—will likely temper the upward pressure on home prices. Implications for Buyers and Sellers For potential homebuyers, the deceleration in price growth is undoubtedly welcome news. The rapid price hikes during the pandemic rendered homeownership out of reach for many aspiring buyers. Now, the landscape appears a bit more promising. Affordability: Slower price gains make homes more affordable, and the prospect of continued appreciation provides a sense of security that your investment will still grow over time. Odeta Kushi, Deputy Chief Economist at First American, notes: “While housing affordability is low for potential first-time home buyers, slowing price appreciation and lower mortgage rates could help—so the dream of homeownership isn't boarded up just yet.” On the flip side, sellers may need to adjust their expectations. While prices are not expected to drop significantly, the days of explosive gains might be over for now. Pricing homes appropriately for the market will be crucial to attracting buyers in this evolving landscape. Bottom Line At a national level, home prices are not expected to decline sharply. Most experts agree that while growth will continue, it will do so at a more moderate pace. However, keep in mind that real estate is inherently local, and market conditions can vary greatly depending on the area. This is where a knowledgeable real estate agent becomes invaluable. If you’re curious about what’s happening with home prices in your specific market, reach out to a trusted real estate professional for guidance and insights tailored to your area.
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